When Richard Genrault joined Hong Kong-headquartered Cosmosupplylab as CFO in 2013, he encountered a certain level of hostility toward the adoption of ERP (enterprise resource planning) software. There was a marked a preference at the time for manual and Microsoft Excel-driven processes.
That was because a failed Epicor implementation that occurred prior to Genrault’s joining had led to a negative opinion of ERP across the organization. But Genrault and the management team recognized that something had to be done to demystify the concept of ERP among staff – or else growth plans would be stifled.
Management decided that a fast and brutal approach was the best way to transition employees onto the new ERP system
For Cosmosupplylab was growing rapidly. The Germany-founded design and manufacturing company manages four factories in China. The items produced range from cases for mobile devices to packaging for major cosmetic brands. The company also provides selected clients with complete vertical integration throughout the design, development and manufacturing process.
“Revenue multiplied by 2.5 times during the first four years,” says Genrault. “Also, clients didn’t want us to use subcontractors. Our strength lay with our knowledge of working with different materials to produce suitable products. We’re still continuing to diversify our product lines and may open our own e-commerce storefront in future.”
It was clear that continuing to operate manually would not support the business, particularly due to the lack of visibility over the supply chain and resources spent managing external applications. Genrault knew company-wide ERP adoption was essential, despite the organization’s previous failed ERP deployment.
Cloud over on-premise
Upon assuming office, he kick-started plans for a speedy implementation by doing away with the traditional RFP process. According to Genrault, the decision was an easy one to make. The company’s CEO had dealt with a number of ERP providers and understood the drawbacks of working with the ERP giants. It could take at least a year to implement their on-premise solution and require significant monetary investment.
“We had neither the time nor human and financial resources to deal with the likes of Oracle or SAP back then,” recounts Genrault. “What we needed was a reactive and simple solution. And we couldn’t spend millions on security. What we needed was a flexible system based in the cloud that could support future growth.”
For him, the best answer was a cloud-based ERP software by NetSuite, a cloud pioneer in which Oracle founder Larry Ellison was an early backer. (Oracle acquired NetSuite last year.) It also helped that the consulting company Cosmosupplylab hired had moved on to supporting NetSuite, despite being an Oracle specialist previously.
Customization had to be minimal because the main goal for deploying an ERP system was to improve processes. “A large amount of customization means you won’t be able to leverage the system’s efficiency and instead add to maintenance costs because you’ll need to apply updates every time a new version is released.”
And the cloud’s subscription model, which turns heavy capex spending on servers and other equipment into more manageable opex (albeit open-ended), was an attractive alternative from the point of view of husbanding and managing financial resources.
Fast and brutal
It took six to seven months for Cosmosupplylab to deploy the NetSuite OneWorld solution, which dealt with financials and fixed assets in Hong Kong. Subsequently, NetSuite modules on demand planning and manufacturing were added to support the China operations.
Management decided that a fast and brutal approach was the best way to transition employees onto the new ERP system.
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